Tenants are typically viewed to be of higher risk than owner-occupiers, and for this reason regular homeowner insurance policies are often invalid for tenanted homes.
Most mortgage lenders will require that you have buildings insurance in place. Landlords building insurance will cover you against a number of eventualities, and is specifically tailored to offer a policy which covers damage that more frequently occurs in tenanted properties. Each insurance policy differs, and you should ensure that you are aware of exactly what is covered by your own policy.
Landlord contents insurance covers the cost of any damage to contents owned by you the landlord. It also generally protects you in the event of a theft committed by the tenant.
As a landlord you can also protect yourself against tenant related incidents. If a tenant refuses to pay rent or attempts to hold you liable for a personal injury, the following insurances will provide cover.
Public Liability Insurance – This covers you if a tenant holds you liable for an injury caused by a fault in your property and includes your legal expenses and damages awarded to tenants.
Legal cover – This will cover your expenses if you need to take your tenant to court.
Rent guarantee – This will ensure you’re still paid, even if your tenant defaults on the rent.
Safety and Energy Performance Certificates
You are required by law to have both a gas safety certificate (CP12) and EPC for any property which is let.
A gas safety certificate is extremely important, and ensures that all gas appliances at the property are in good working order. As a landlord, you are responsible for the safety of your tenants, and as such a gas safety certificate must be renewed every 12 months.
An EPC provides information about a property’s energy efficiency and carbon dioxide emissions. It is accompanied by a report which gives suggestions and recommendations on how to reduce your property’s energy consumption and emissions. It lasts for 10 years from the date of issue.
Whilst electrical safety certificates are not required by law, it is advised that landlords carry out and keep a record of periodic inspections of fixed electrical installations (like sockets and light fittings), as well as annual testing of all portable appliances (such as kettles, toasters etc), known as PAT testing.
It is important to reference check any tenant who will be contributing to the monthly rent.
A good reference will include an identity check to ensure the tenant is who they say they are, confirmation of their employment status and current salary (and therefore their ability to pay the rent), and their history of paying rent in the past. It will also include both employer and landlord references, details of any bankruptcies & CCJ’s and their previous credit history.
If your tenant is rejected on the grounds of a poor reference, they may be able to offer a friend or relative as a guarantor. This guarantor should also be reference checked to ensure their suitability to pay the rent and any other bills, should the tenant default.
Having a contract is vitally important. It is important to read through the contract and make sure you are in agreement with the terms and conditions of that contract. You may find that an “off the peg” contract does not cover specific requirements you have. You should amend the contract as necessary to your requirements. Ask the tenant to initial each page, and sign and date as appropriate.
Alternatively, we offer a bespoke contract writing service, which provides you with a contract specific to your property.
You should ensure that you are in receipt of a signed contract prior to allowing your tenants access to the property or giving them keys.
Prior to your tenants having access or keys to your property, you should ensure that you have received your deposit and first month’s rent, as cleared funds (either cleared funds in your bank or cash, but never a cheque presented to you on the day).
You should not charge more than two month’s rent as deposit. If you do, your tenant may be automatically entitled to sublet the property.
Once you have the deposit, you must place it with a Government-backed deposit protection scheme, and notify your tenants within 30 days of taking the deposit which protection scheme you have used, and issue the prescribed information.
You should ensure that you are in receipt of a the deposit and first months rent as cleared funds prior to allowing your tenants access to the property or giving them keys.
The inventory is a thorough record, with documentary evidence and photographs, which demonstrates the condition of your property at the commencement of any tenancy.
This document then forms part of your contract, and provides a standard to which the property should be kept. The inventory should be signed by both tenant and landlord, and be sufficiently thorough that it can be used to settle any dispute about the condition of your property that may arise at a later date.
You can download a free inventory from our documents and guides, which you can adjust as necessary to ensure it is relevant to your property. You should take pictures/video footage of each room to ensure that there is no doubt as to the condition of the property, or it’s fixtures and fittings.
On the tenancy commencement date, you will meet your tenants at the property, and provided that they have signed the contract and paid the appropriate deposit and rent, you will hand the property to them.
You should walk them around the property, going through the inventory as you do. Take a camera with you, so that if the tenant wants a particular thing noted, you can take photographic evidence (for example, they might notice a mark on the carpet that they wish to be noted in the inventory).
Check the meter readings with the tenant present, and also take a photograph of the meter reading.
It is always a good idea to show the tenant where the stop clock and electricity consumer unit (fuse box) is.
Once you have shown the tenant around, it is important that you ask the tenant to initial each page of the inventory, and sign to say that they are in agreement with information contained within the inventory, the meter readings, and that they have received the sets of keys you have given them.
It is always prudent to make periodic checks of your property to ensure it is being kept in an appropriate manner.
You should give your tenants notice that you will be making a property check, and you should ask that they are present at the time of the check.
During the check, it is useful to have a copy of the inventory with you so that you can compare the standard at the tenancy commencement to current day.
At the conclusion of the tenancy, it is important to meet the tenant on their final day at the property to check that it is being left in a condition which is on par with the inventory. Take final meter readings with the tenant present, and include photographic evidence of the each meter reading.
It can often be prudent to attend the property (by prior arrangement) a week or so before the end date of the tenancy. At this point, any issues can be highlighted, and potentially dealt with before the tenancy conclusion (for example, carpets which need cleaning, walls which need filling/painting). This can allow the deposit to be handed back to the tenant at the end of the tenancy without deduction or dispute. In the event the tenant fails to make good any necessary works you are able to demonstrate that you have given the tenant sufficient warning of the works required.
The difference between the original inventory and the property’s condition at the end of the tenancy will form the basis of any claim to withhold the deposit. It is important for you to attend the check out with the original inventory and a camera, and for the tenant to be present.